Residential Tenancies Branch

Landlord's Non-payment of Utilities

s. 60, 61, 154(1), 154(2)4, 179.1, The Residential Tenancies Act
s. 25(2), 25(2.2), Residential Tenancies Regulation

Definitions

Mortgagee: a person, mortgage company or financial institution that takes a mortgage interest in a property as security for a loan.

Order to redirect rent: when the Branch orders tenants to pay their rent to the Branch, instead of to their landlord; when the tenant receives an Order and pays the Branch, rent is considered paid.

Safety Net Program: a Branch program that helps tenants with certain needs to contact people or programs that can help them find a place to live when a building is closed down because there is no utility service.

Utility company: the agency that provides the utility service. For example: Manitoba Hydro-Natural Gas, Manitoba Hydro-Electricity and City of Winnipeg Water.

Utility: heat, gas, electricity, water; it does not include cable TV.

If a utility service is included in the tenant’s rent, the Branch tries to make sure the services stay on, even if the landlord hasn’t paid the utility bills.

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A utility company must notify the Branch before they disconnect utility service to any residential rental complex in which one or more rental units are occupied. If the Branch believes that the landlord is responsible to provide the utility service, the Branch orders the landlord to pay the bill or make arrangements with the utility.

The Branch will usually tell the utility company to keep the service on or if it’s already turned off, to reconnect it.

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If a landlord doesn’t pay the bill or make satisfactory arrangements with the utility company, the Branch redirects rents to pay the utility bills for a residential complex. The amount of rent redirected each month is usually about half the total potential rent for the complex. The Branch may re-direct more rent if the arrears are high.

The Branch redirects rent until the utility bill is paid in full, or until the landlord makes arrangements with the utility company to keep the service on.

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The Branch uses the rent to pay the past-due part of the account first. In some cases, there may be more than one utility account in arrears. For example: The landlord may not have paid either the gas or the hydro bill. When more than one utility is involved, the Branch divides the rent between the utilities, depending on the amounts owed. For example: The total owing is $1,500.00; the gas bill is $1,000.00 (2/3 of the total) and the hydro bill is $500.00 (1/3). If the Branch has $1,000.00 to pay the bills, the gas company would get two-thirds, or $666.66 and hydro would get one-third, or $333.33.

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In some cases, the outstanding utility bills are so high that it’s not practical for the Branch to try to collect rents and pay the bill. When this happens, the Branch sends an Order to the utility company telling them to disconnect service. The Branch sends the tenants and the health authorities a copy of the Order. If the service gets disconnected, the tenants will probably have to move. If that happens, they may contact the Branch’s Safety Net Program for information.

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For some accounts, the utility company may demand that a landlord pay a security deposit to protect the utility company from future non-payment. The Branch may use the rent it collects to pay the deposit.

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In some tenancies, the tenant is responsible for paying for the utility service. If the service is shut off because the tenant doesn’t pay the bill, the Branch doesn’t get involved in trying to restore service. If this happens, the landlord can tell the tenant, in writing, to pay the bill. If the tenant doesn’t pay the bill, the landlord can give the tenant notice to move out. If the unpaid bill creates a loss to the landlord, the landlord may also file a claim for compensation. If the landlord asks the Branch for assistance, the Branch will contact the tenant to explain their responsibilities and the landlord’s right to end the tenancy.

Procedure

Overview   

If a landlord doesn’t pay a utility bill, the officer tries to get the landlord or mortgagee to make payment arrangements with the utility company. If this isn’t successful, tenants are ordered to pay rent to the Branch. The Branch then pays the utility company. The officer redirects rent until the utility bill is paid.

Steps ▼   

1.     A tenant or a utility company notifies the Branch that utility service to a         rental unit or residential complex will be disconnected. The officer finds         out what other utilities the landlord supplies as part of the tenancy         agreement. The officer checks with the other utility companies to see if         the service is scheduled for disconnect.

2.     The officer issues an order to the landlord to make arrangements with         the utility company/companies, by a specified date, to make sure the         service stays on. The officer may also advise the landlord that rent will be         redirected if the landlord fails to make arrangements.

        The officer may also order the utility company to continue to supply the         utility.

3.     If the landlord makes arrangements, the utility company lets the officer         know. The officer closes the file.

4.     If the landlord appeals the order, the officer doesn’t do anything more on         the file until the Residential Tenancies Commission makes a decision. If         the landlord appeals, the officer attends the appeal hearing to provide         information on the Branch’s file and ask the Commission to confirm the         Branch’s Order. The officer can’t redirect rent unless the appeal is         decided. The Branch enforces orders issued by the Residential         Tenancies Commission or the Court of Appeal.

5.     If the landlord doesn’t make arrangements or appeal the Order, the         officer may do a title search on the residential complex to confirm         ownership.

6.     If, at any time throughout the process, it is not practical for the Branch to         try to collect rents and pay the bill, the officer may issue an Order allowing         the utility company to disconnect service as of a certain date. The officer         sends a copy of the Order to the utility company and the landlord and         tenants.

7.     If the officer learns that a mortgagee is attorning rents to pay the         mortgage, the officer contacts the mortgagee. The mortgagee often         agrees to make arrangements for paying the utility bills. Once the utility         company confirms that service is guaranteed to the tenants, the officer         closes the file.

8.     If the landlord or the mortgagee doesn’t make arrangements with the         utility company, the officer must get a list of the tenants living in the         building. If necessary, the officer may go to the building to get the names         of the tenants.

9.     The officer then issues an Order to some of the tenants of the residential         complex to pay rent to the Branch. The landlord receives a copy of the         order.

10.   By the second week of each month, the officer sends the landlord a         statement to show which rents the Branch received.

        The officer sends follow-up letters to tenants who didn’t pay their rent to         the Branch.

11.   If the Branch doesn’t receive any rents, the officer visits the building.

        If the officer finds a tenant(s) living in the building, they’ll ask the tenant         why they haven’t paid their rent to the Branch. The officer will tell the         tenant that if they don’t pay the rent, the Branch can’t pay the utility bills to         keep the service on. If the Branch still doesn’t get a tenant’s rent, they         may allow the utility company to disconnect.

        If the officer finds out that no one is living in the building, the officer tells         the utility company they can disconnect service. If the utility company finds         a tenant living in the building when they go to disconnect the service, they         must notify the Branch.

12.   The Branch charges the landlord a monthly administration fee when         rent is redirected. The rent collected is applied to the monthly         administration fee first and then to past due portions of the bills. If there         isn’t enough money to pay the bills in full, the money is divided according         to how much is owed on each bill. (see example in Policy box) The         Branch doesn’t pay out rent until after the appeal period.

13.   When the utility company advises the officer that the utility service is no         longer scheduled for disconnect, the officer cancels the Order to Redirect         Rent. The officer notifies the tenants, landlord and/or mortgagee. The         officer returns any unused rent money to the landlord and closes the file.

Forms & Form Letters

X-Referencing

For more information on the Branch’s Safety Net Program, see Section 1.

Policy Developed

September, 1992*

Last Revision

October, 2004

Other Resources

None

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